Mario Gabelli on Following Leaders Bill Ackman and John Malone

For those who don’t have the time or inclination for engaging in the analysis of individual securities, investors have the option to follow or anticipate leading investor’s moves. Mario Gabelli, chairman and chief executive officer of Gamco Investors, was on Bloomberg T.V.’s “Market Makers” providing his thoughts on the dynamics of this investment process.

Gabelli initially discussed the idea of investing in J. C. Penney Company (JCP) based on renowned hedge fund manager Bill Ackman’s move into the stock. Gabelli said he was actually buying some JCP since the market had probably over-discounted some of the negative news emanating from the company.

Gabelli said they keep a list of names which they follow. However, he added they don’t buy everything these investors are buying.

Interviewer Erik Schatzker asked Gabelli how he decides which leading investors to follow. Gabelli said he looks at industry fundamentals, and quipped that it didn’t matter how good you knew the steel industry, over 30 years you didn’t make any money. He also mentioned the media area; an industry his firm specializes in.

Schatzker questioned Gabelli about his interest in Dubai Sheikh Mohammed bin Rashid Al Maktoumh. From there Gabelli transitioned into a discussion of John Malone “a three dimensional chess player,” Carl Icahn, and how he tries to figure out where they’re putting their money.

Disclaimer: It is very difficult to outperform a buy and hold strategy. Many investors have found themselves best served over long time horizons by investing regularly in a diversified portfolio of stocks or low cost, broadly diversified indexed stock funds. Information presented is based on analysis of past data and assessments by the Tactical Timing System model. Future performance may not reflect past performance. Profitable trades are not guaranteed. No system or methodology ensures stock market profits. Although accuracy is strived for, no guarantee is made regarding the accuracy of data presented. Nothing presented here should be considered investment advice, but merely the humble opinion of the author.